Businesses that invest in equipment not in the PIC IT and Automation Equipment List (232KB) but which automate or mechanise their business processes and enhance productivity may apply to IRAS to have their equipment approved for PIC on a case-by-case basis.
Criteria for approval
IRAS will grant approval if the following criteria are met:
From Year of Assessment 2013
- The equipment automates or mechanises the business' work process(es). Please refer to examples of automation/ mechanisation below1;
- The equipment enhances productivity of the business (for example, in terms of reduced man-hours, more output or improved work processes); and
- If the equipment is a basic tool2 used in the business,
(a) it has to increase productivity compared to existing equipment used in the business3; or
(b) it has not been used in the business before.
1 As a general rule, the automation equipment should automate or mechanise the work processes of the business that were previously done manually.
New! Examples to illustrate how an equipment automates or mechanises the work processes of a business:
a. Rubber Trimming Machine
Existing method: The current method in the company's rubber manufacturing process is to have an operator to trim the rubber manually with a rotating grinder.
New method: This machine, which replaces the operator, performs high-speed rubber trimming based on pre-configured machine settings.
b. Hydraulic Guillotine Shear
Existing method: Workers used gas cutting torches and manual saw machines to cut the metal sheets. This old method resulted in uneven line cuts and rough edges which required constant refining using a manual saw.
New method: This machine is used to provide a straight and clean cut across large metal sheets automatically. It removes the need for manual cutting and refinements of the rough/uneven edges.
c. Key Management System
Existing method: The business has to hold and maintain a large number of keys for accessing server racks, safe boxes, security cabinets and lockers. This involves manual daily recording of key issuance and return in a record book.
New method: The key management system automates the process of key issuance, return and tracking by:
• releasing keys that a user is authorised to withdraw based on pre-defined access rights upon presentation of his access card;
• indicating to the user where the keys should be placed during key return, ensuring that they are returned to the correct position;
• logging all transactions in the system of which reports can be generated for audit trails.
The equipment eliminates the need for manual recording.
d. Conveying System
Existing method: Workers are required to physically carry the finished goods to the packaging area.
New method: Finished goods travel directly on the conveyor system, which are transported out of the production premises for carton packaging. The system automates/ mechanises the manual goods transportation process. The goods are no longer carried to the packaging area by workers.
2 A basic tool is one which is necessary for carrying out the trade or business, and is commonly used in the industry. Examples of basic tools used in the laundry business include washing machines and dryers.
3 For newly set-up businesses, the automation equipment will be compared with the standard basic equipment used by other businesses in the same industry that are of comparable size to the newly set-up business.
IRAS will evaluate each application based on the criteria described above. Approval is granted depending on the circumstances of the case.
How to apply
Businesses seeking case-by-case approval have to submit the following form to IRAS:
What to note when applying for case-by-case approval
- Businesses that use the equipment for their trade or business can apply for case-by-case approval, with their assessment of meeting the criteria. Vendors of the equipment should not make the application.
- IRAS will process the application within three weeks of receiving the application form and will inform the applicant of the outcome by post. Submission must be complete at the time of application.
- Please do not apply for the cash payout or claim PIC deductions/allowances in your income tax return until approval has been granted.
- New! After approval has been granted, you may choose to claim enhanced allowances or cash payout on the approved PIC equipment.